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Key Documents Required for Used Car Loan

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There is a different sense of joy that comes with owning a car. Once you own a car you know that you can go where your heart pleases, go to work without being squished in the tin-tight train and make that special family trip with your parents you always wanted.

This feeling is now pertinent among many. It no longer as expensive to buy a brand new car, but people are now more than willing to buy a second-hand car as well.

Now, with families eager to have their own car, second-hand vehicles are emerging fast as a great option. With a used car loan at your disposal, today getting hold of used cars is an easy task. Top financial institutions are leaving no stone unturned in their quest to deliver the low-interest, easily available and fast second-hand car loan that you deserve. With the submission of a few standard documents along with your application, here is how you can get your used car loan approval quickly. Let us find out the documents required for this credit product.

Let us divide the used car loan borrower category into two buckets: salaried and self-employed. Financial institutions have slightly different document requirements based on the salary income status of the potential borrower.

For salaried persons

Typically, application for a used car loan needs five key documents. A copy of the original document is enough for the most lenders.

First, you need to furnish a copy of your PAN card. As you know, this document is given by the income tax department to the taxpayer. When you hand over a copy of your PAN card for a second-hand car loan, remember to mention this is for this particular loan application process only. Next, you will be asked for a proof of address. You can give any document that establishes your proof of address.

Thirdly, the financial institution will ask a proof of the signature of the borrower on whose name the used car loan is being applied for. Fourthly, submit a few copies of your photograph. Standard passport size photographs are a standard requirement. This help put together your profile before the used cars loan approval process starts.

Since you are salaried, financial institutes like Tata Capital will ask for form 16 (that can be sourced from employer), salary slip or Income Tax return. Any of these documents is enough for applying for a loan for used cars. Sixth, the lender may ask you to submit three-month bank statement, preferably of your salary account. If you submit all the documents properly, within hours you could be the proud recipient of a second-hand car loan.

As a salaried person borrower, you should keep a track of all the documents that you have submitted along with the application for the used car loan. Preferably, keep a diary or note about the nature of papers and the name of the person who collected the documents, used cars. You can always consult the lender directly if any issues emerge during the second-hand car loan application process.

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For self-employed

Not everybody is salaried today. With millennial wanting to take a break from 9 to 6 jobs and aspiring to be their own bosses, many are taking the self-employed route to generate adequate income without the hassles of full-time employment.

Lenders are ready to offer used car loan to the self-employed persons too. After all, the logic for using and owning used cars is valid across the customer spectrum. Hence, a second-hand car loan can facilitate owning a dream car of your choice within your budget. The document requirements vary a little for the self-employed borrowers. Please pay careful attention to the following.

Firstly, the self-employed person will be asked to submit ownership documents. These can be the registered partnership deed or certificate of incorporation of public and private limited companies including memorandum and articles of association. The time of existence of your business or self-employment source is an important factor for lenders. Since the self-employed borrowers don’t have a salary, documents pertaining to their business are very vital to assess creditworthiness.

Next, they can ask you for the commencement of business certificate. It is very easy to access this document unless you are operating totally informally. Then, like the salaried persons, a self-employed individual wanting used car loan is asked to submit a copy of PAN card and proof of address. Keep the original documents handy so that you easily furnish them if there is an issue. Most lenders also ask for photographs and are now a pretty common requirement needed of self-employed potential borrowers for a used car loan.

Lastly, financial lenders may ask you submit ITR and audited balance sheet and profit and loss statement of your entity. This last category of documents is important for self-employed or business persons who seek a used car loan. These documents establish the taxpayer status, income levels and also indicate the formal status of income. Lenders always want to ensure that the second-hand car loan they are disbursing is going into safe hands.

Yes, it is that simple. Your basic documents can help you avail a used car loan from financial institutes like Tata Capital so you can buy the car of your choice.